S&P 500 futures maintain gain even as Empire Fed Index slumps
U.S. STOCK FUTURES held gains even as the Federal Reserve Bank of New York's economic index showed New York-area manufacturing shrank more than forecasting in December.
BLOOMBERG FILE PHOTO/JIN LEE
By Michael P. Regan Bloomberg News
NEW YORK - U.S. stock-index futures maintained gains even as a Federal Reserve report showed New York-area manufacturing shrank more than forecast in December.
The Federal Reserve Bank of New York’s general economic index dropped to minus 8.1, the fifth month of contraction, from minus 5.2 in November. The median forecast of 55 economists in a Bloomberg survey called for minus 1. Readings of less than zero signal contraction in New York, northern New Jersey and southern Connecticut.
Futures on the Standard & Poor’s 500 Index expiring in March added 0.4 percent to 1,415 at 8:31 a.m. in New York.
The S&P 500 has lost 1.9 percent so far this quarter, the worst performance among 24 developed markets, as President Barack Obama and House Republicans differed over how to avoid automatic deficit-reduction measures.
Obama and House Speaker John Boehner haven’t reached a deal with two weeks remaining to avert more than $600 billion in automatic spending cuts and tax increases, known as the fiscal cliff, set to start in January. The Congressional Budget Office has said a failure to prevent those changes may lead to a recession in the first half of 2013.
Republicans and Democrats in Congress are starting to talk about the benefits of waiting until January to reach a budget deal. Obama rejected an offer by Boehner to raise rates on household income above $1 million a year in exchange for containing entitlement program costs.
In Japan, the Nikkei 225 Stock Average rose to the highest in eight months after the Liberal Democratic Party returned to power on a campaign for more economic stimulus and the doubling of the nation’s inflation goal.